Glossary: All concepts about buying and selling a house.

Purchase and Sales Promise Agreement

The Promissory Purchase and Sale Contract (PPSC) is a legal document that is signed prior to the acquisition of a property or land. The purpose of this contract is to safeguard the rights and duties of both the buyer and the seller.

On one hand, the document ensures that the seller commits to selling the property, "reserving it" until the deed is signed. On the other hand, it determines that the buyer undertakes the commitment to purchase the property, before signing the final acquisition document.

At the moment of signing the CPCV, as a rule, the buyer gives a deposit to the seller. So, if they back out of the purchase, they may lose that amount (under conditions agreed by both parties).

Real Estate Mediation Contract

The Real Estate Mediation Contract (CMI) is another document signed if the sale of a property is conducted through a real estate agency.

The objective of this contract is for there to be a commitment on the part of the agency to seek interested parties for the purchase of the house, according to a certain remuneration.

CMI typically has a duration of 6 months (it can also be 3 or 12 months, for example) and, if not canceled by either party, it can be renewed for similar periods.

Energy certificate

The energy certificate is a necessary document in the acquisition/sale of a house, being part of the documentation related to the property. This concerns the energy efficiency of the property, determining its energy class (from A+ - very efficient - to F - very inefficient) and providing information about insulation, water, heating, and ventilation.

This certificate also provides information on measures that can make the property more energy efficient. It can cost between 35 and 65 euros, depending on the typology of the property.

To obtain the energy certificate, an energy assessment of the property must be carried out by a qualified expert from the respective area of residence, who can be found through the ADENE Qualified Experts Database.

Real estate ledger

The property booklet is one of the identification documents of a property, gathering all the characteristics of location, areas, description, holders, and fiscal elements. It is in this document that the Taxable Asset Value (VPT) is found, determining the Municipal Property Tax (IMI) to be paid.

This document can be requested in person at a Tax Office counter or online, on the Portal das Finanças website, and is valid for 12 months.

Permanent property certificate

The permanent property certificate has all the property information at a historical level, such as all previous owners, charges, improvements, among others.

The cost of this certificate depends on where it is requested: in person at a Land Registry Office it costs 20 euros, and online at the Land Registry the cost is reduced to 15 euros.

Statement of no debts to the condominium.

The declaration of no debt to the condominium has become a mandatory document in the process of selling a house in April 2022, having to be delivered to the buyer before the deed.

This statement informs about all charges related to the condominium of the fraction that is being acquired. In other words, if the property is located in a building with condominium, the seller must deliver this statement to the new owner 15 days before the deed by registered mail.

Also note that after the seller's request, the condominium has a period of 10 days to issue this declaration.

License of use

The license of use is another document that identifies the property, in this case, regarding its purpose. That is, this license dictates the use that the property will have: residence, commerce, services, or industry.

The document can be requested at the City Hall of the area where the property is located. However, if the building or unit is from before 1951 and has not been altered, expanded, or rebuilt, a use license is not necessary.

Technical information of the housing

The housing technical sheet refers to the most technical and functional aspects of a property, and should be prepared after construction, reconstruction, expansion, or alteration of the building.

The purchase/sale of a property is mandatory in all cases, except if any of these changes were made before March 30, 2004, or if the occupancy license was requested before that date.

Writing

The writing in the purchase and sale of a property is the final moment of transferring the property, which is finalized through the signing of a contract.

The deed takes place with the celebration of a purchase and sale contract, with the buyer becoming the new owner of the property. If the process is carried out through a housing loan, it is followed by a loan agreement with a mortgage, which determines all information regarding the loan.

After the celebration of the second contract, the bank loans the amount to pay for the property to the seller.

Commercial value

The commercial value of a property corresponds to how much the property is worth in the market, being the value for which it is acquired.

Assessment value

The appraisal value of a property is the value determined by certified experts who assess the property based on certain factors such as location, condition, among others. This is used as a reference for mortgage loans.

Tax Heritage Value

The Property Tax Value is the real value of a property in a certain year, recorded in the property register and used for tax purposes to determine, for example, the amount to be paid for the Municipal Property Tax (IMI).

Private gross area

The gross private area includes the entire total surface from the outer perimeter to the separator axis, whether walls, building or autonomous fraction. That is, it includes: rooms, kitchen, living room, hallways, halls, bathrooms, basements, attics, private and enclosed balconies. Outside the gross private area are open balconies and terraces.

Gross building area

The gross building area is related to the building, aggregating the gross floor areas built or capable of being built, such as stairs or elevator shafts. However, if the area to be built serves as parking, it is not included in the calculation of this area.

Dependent gross area

The gross dependent area includes all covered locations that are for exclusive use, whether they are common areas or outside the building/fraction. These locations are called accessories because their use is not related to the building. Therefore, they include: garages, parking spaces, facilities for animals, storage rooms, attics, and directly accessible basements.

Useful area

Finally, the useful area is the one that combines all areas of the various compartments of the property, such as cabinets, interior corridors, bathrooms, storage rooms, or similar function places.

If you are looking to sell your property, or are looking to buy one, know that the real estate agents Casa no Minuto are available to help for free and in a personalized way. If you need to resort to housing credit, also the credit intermediaries Poupança no Minuto can handle all the mediation with the banks, so that a costly process becomes simple.